Managing Litigation Across Borders

Few businesses expand into foreign markets with potential litigation in mind. Few, however, are immune from disputes that develop in other jurisdictions. In international litigation, mastering the facts of the case and the law also requires an appreciation of the different legal systems involved and cultural aspects of the other jurisdiction.

1. Local Counsel. Local counsel can offer a convenient base of operations, as well as the benefits of reputation and connections with regulators, courts, experts and other businesses. Before engaging, take the time to research local counsel extensively — review recommendations, qualifications and experience, with particular attention to the industry and relevant courts, as well as any political connections. The process of engaging counsel may require client background checks, proof of identity, and negotiating an engagement letter, all of which take time before you may receive legal advice. Any urgent deadlines should be understood to ensure that the engagement process is completed in time. Local counsel that deals regularly with US litigants may help to bridge cultural differences.

2. Procedural Issues. When litigating internationally, do not take anything for granted, as procedural rules differ in every jurisdiction. Procedural rules can create barriers to managing and overseeing developments in the case, as well as monitoring potential exposure. Questions to consider: What type of courts does the foreign jurisdiction have, and are proceedings open to non-attorneys and clients? Will there be an oral hearing to present further arguments or is everything decided on the pleadings? How long will the process last at each stage? Is there an opportunity for appeal, and when will a judgment become final? Depending on the jurisdiction, the legal team may consist of different legal professionals with different responsibilities and limitations. For example, in the United Kingdom barristers and solicitors, and now solicitor-advocates, serve different roles in litigation. In France, notaries are highly trained, licensed practitioners that can create corporate charters, wills and other public documents and play a substantive role in formalizing and executing documents. Local counsel can explain the differing roles, whether separate professionals are required and the range of fees to be budgeted for each service.

3. Discovery. Most jurisdictions do not have discovery similar to the United States. Discovery can be reduced or non-existent. For example, in Europe, discovery may be conducted under the Hague Convention or the treaty establishing the European Communities. In general, both entail making a request in the originating court, the originating court transmits the request to a central authority (or court) designated by the foreign court, and then the foreign court completes the request. This process can easily involve a timeline of six to twelve months. In other jurisdictions, local customs and legal practice may be for a party to screen documents and provide less than complete information not only to the other side but to their own counsel. In some cases, discovery through the United States courts may be available in aid of foreign litigation, by filing a separate application in a United States district court. In short: Discovery, if available, will take longer and must be strategically planned well in advance.

4. Ethical Standards. Different ethical standards apply in each jurisdiction. In the United States, ethical rules are binding on attorneys. By contrast, in other jurisdictions, ethical rules may only be advisory and subject to interpretation. Your local counsel may have restraints on their representation that will affect your litigation or require withdrawal under certain circumstances. To avoid surprises at a critical point in the case, discuss with local counsel what ethical rules apply and when.

5. Privilege. The scope of legal privileges also varies from one jurisdiction to another, with the risk that some communications may inadvertently compromise confidential information. For example, in many European Union countries, the attorney-client privilege may not apply to all communications to and from in-house legal counsel. In the Netherlands, the work product privilege is broader than in the US – all communications with experts are confidential. At the beginning of the case, discuss the scope of legal privileges with local counsel so that confidential information is adequately protected.

6. Manage Time and Cost. With careful planning, the cost and timing of international litigation can be managed. An experienced translator can handle translations back and forth as the U.S. party and its counsel make revisions before filing pleadings in the local language. In regards to scheduling, plan meetings in advance, taking into consideration time differences, travel costs, court dates and availability of the parties, experts and counsel. Schedules need to be organized well in advance to accommodate local holidays in each jurisdiction, such as extended holidays in Europe at year-end and in August. Advance planning can reduce costs of litigation and advance the process toward resolution.

Every jurisdiction has its own rules and procedures for resolving disputes. When managing litigation across borders, US litigants are well served by managing the case actively and remaining informed about different legal practices and customs.